Sustainability challenges and the ambivalent role of the financial sector

Arnim Wiek, Olaf Weber

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

Over the past few decades, the financial sector has sought to positively contributing to sustainable development through innovative products and services. However, in its business-as-usual the financial sector continues to contribute to military interventions, environmental degradation, growing disparity of incomes, de-coupling of finance and real economy, and global economic crises. This article presents a framework of how to appraise the positive and negative contributions of the financial sector to sustainable development, from a systems perspective. On this base, the article proposes an approach for designing effective finance interventions to complex sustainability problems. Based on similar experiences from studies on water governance and technology development, the approach proposes a participatory procedure, first, to identify the role of the financial sector in complex sustainability problem constellations and, second, to develop intervention strategies for financial intermediaries interested in shifting their role and mitigating the identified problems. We discuss challenges of establishing causal links within the problem constellation, which is a prerequisite for successful intervention design, as well as in the cause–effect structure of the interventions themselves. The article concludes with outlining future research needs.

Original languageEnglish (US)
Pages (from-to)9-20
Number of pages12
JournalJournal of Sustainable Finance and Investment
Volume4
Issue number1
DOIs
StatePublished - Jan 2 2014

Fingerprint

Financial sector
Sustainability
Sustainable development
Finance
Water governance
Decoupling
Environmental degradation
Systems perspective
Intervention strategies
Financial intermediaries
Technology development
Global economic crisis
Income
Military intervention

Keywords

  • complexity
  • impact investment
  • sustainability challenges
  • sustainable investing

ASJC Scopus subject areas

  • Finance
  • Economics, Econometrics and Finance (miscellaneous)
  • Business and International Management

Cite this

Sustainability challenges and the ambivalent role of the financial sector. / Wiek, Arnim; Weber, Olaf.

In: Journal of Sustainable Finance and Investment, Vol. 4, No. 1, 02.01.2014, p. 9-20.

Research output: Contribution to journalArticle

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